IRPIN, Ukraine - Russia allowed gas to keep flowing to Europe on Friday despite a deadline for buyers to pay in roubles or be cut off, and peace talks resumed, with Moscow saying it would respond to a Ukrainian offer.
An order by President Vladimir Putin cutting off gas buyers unless they pay in roubles from Friday had caused alarm in Europe, where it was seen as Moscow's strongest card to play to retaliate for Western financial sanctions. Germany, the biggest buyer, rejected the demand as "blackmail".
But pipelines were pumping as normal on Friday. Kremlin spokesperson Dmitry Peskov said the decree would not affect shipments which were already paid for, only becoming an issue when new payments were due in the second half of the month.
"Does this mean that if there is no confirmation in roubles, then gas supplies will be cut off from April 1? No, it doesn't, and it doesn't follow from the decree," Peskov told reporters.
Negotiations aimed at ending the war resumed by video link, even as Ukrainian forces made more advances on the ground in a counterattack that has repelled the Russians from Kyiv and broken the sieges of some cities in the north and east. Russia said progress was being made in the talks and it would respond to a Ukrainian peace proposal delivered earlier this week.
The Red Cross said it had been barred from bringing aid in what would have been the first humanitarian convoy to reach the besieged port of Mariupol, but still hoped to be able to organise the evacuation of residents by bus.
After failing to capture a single major Ukrainian city in five weeks of war, Russia says it is pulling back from northern Ukraine and shifting its focus to the southeast, including Mariupol.
Russia has painted its draw-down in the north of Ukraine as goodwill gesture for peace talks. Ukraine and its allies say the Russian forces have been forced to regroup after sustaining heavy losses due to poor logistics and tough Ukrainian resistance.
Irpin, a commuter suburb northwest of Kyiv that had been one of the main battlegrounds for weeks, is now firmly back in Ukrainian hands, a wasteland littered with burnt-out tanks.
Volunteers and emergency workers were carrying the dead on stretchers out of the rubble. About a dozen bodies were zipped up in black plastic body bags, lined up on a street and loaded into vans.
Lilia Ristich was sitting on a metal playground swing with her young son Artur. Most people had fled; they had stayed.
"We were afraid to leave because they were shooting all the time, from the very first day. It was horrible when our house was hit. It was horrible," she said. She listed off neighbours who had been killed - the man "buried there, on the lawn"; the couple with their 12-year-old child, all burned alive.
"When our army came then I fully understood we had been liberated. It was happiness beyond imagination. I pray for all this to end and for them never to come back," she said. "When you hold a child in your arms it is an everlasting fear."
The governor of the Kyiv region, Oleksandr Pavlyuk, said on Friday Russian forces had also withdrawn from Hostomel, another northwestern suburb which had seen intense fighting, but were still dug in at Bucha, between Hostomel and Irpin.
Further north, Russian forces have withdrawn from the site of the Chernobyl former nuclear power plant, although Ukrainian officials said some Russians were still in the radioactive "exclusion zone" around it.
Over the past 10 days, Ukrainian forces have recaptured suburbs near Kyiv, broken the siege of Sumy in the east and driven back Russian forces advancing on Mykolaiv in the south.
In the latest Ukrainian advance, Britain's Ministry of Defence said on Friday Ukrainian forces had recaptured villages linking Kyiv with the besieged northern city of Chernihiv.
RED CROSS AID BLOCKED
Friday's video peace talks picked up from a meeting in Turkey on Monday, where Ukraine offered to accept neutral status, with international guarantees for its security.
The Ukrainian proposal would put off discussion of Russia's territorial demands, including Crimea, which it annexed in 2014, and the Donbas which it demands Ukraine cede to separatists.
"We are preparing a response. There is some movement forward, above all in relation to the recognition of the impossibility of Ukraine" joining NATO, Russia's Lavrov said on Friday. He said there is a "lot more understanding of another reality. I mean the situation in Crimea and Donbas".
Putin sent troops on Feb. 24 for what he calls a "special military operation" to demilitarise Ukraine. Western countries call it an unprovoked war of aggression and say Putin's real aim was to topple Ukraine's government.
Russia now says it has turned its focus to the Donbas, a southeastern area where it has backed separatists since 2014. Russia's biggest target in that area is Mariupol, where the United Nations believes thousands of civilians have died under a month-long siege, suffering relentless bombardment without access to food and water supplies, medicine or heat.
The International Committee of the Red Cross said a convoy it had organised had been denied permission to bring aid into Mariupol. It did not say who had refused permission.
Spokesperson Ewan Watson said the convoy of buses had set off for Mariupol on Friday without the aid supplies, in the hope of reaching the city to evacuate trapped civilians. Ukraine has blamed Russia for refusing to allow any aid to reach the city.
A fuel depot in the Russian city of Belgorod near the Ukraine border caught fire, and the regional governor said it had been hit by two Ukrainian helicopters in what would, if confirmed, be Ukraine's first known airstrike on Russian soil. Ukraine's defence ministry did not immediately respond to a request for comment. Russian oil firm Rosneft, which owns the depot, reported the fire without identifying the cause.
(Additional reporting by Pavel Polityuk in Lviv, Olzhas Auyezov in Almaty and other Reuters bureaux; writing by Peter Graff; editing by Philippa Fletcher)